Once again, Warren Buffett ( Trades , Portfolio ) looks ahead of the game.
After facing criticism in 2024 for aggressively selling stocks while markets soared , the Berkshire Hathaway ( NYSE:BRK.A ) chairman is now being praised for his well-timed exit as U.S. equities head toward a bear market.
A Contrarian Move That Paid Off
While the S&P 500 posted back-to-back 20%+ gains in 2023 and 2024, Buffett trimmed his equity holdings for nine consecutive quarters, leaving Berkshire with a record $334 billion in cash by year-end. At the time, skeptics questioned his reluctance to reinvest, but now, as markets tumble, that caution looks remarkably prescient.
Big Bets on Cash Over Stocks
Buffett cut his stake in Apple ( NASDAQ:AAPL ) from 49% to 23% of Berkshire's portfolio and also reduced his holdings in Bank of America ( NYSE:BAC ). The move aligns with his famous advice: Be fearful when others are greedy, and greedy when others are fearful.
With the S&P 500 down 10% and the Nasdaq Composite off 13% in the last month, hedge fund managers and retail investors alike are calling it a perfectly timed cash-out.
Hedge fund manager Anurag Singh noted that Buffett's decision to hold nearly $325 billion in cash, about 50% of Berkshire's portfolio, now makes sense after all.
Meanwhile, Buffett's 2008 op-ed, Buy American. I Am. originally published during the Great Recessionis going viral as investors wonder if history is repeating itself.
This article first appeared on
GuruFocus
.